[Note: The following is the latest in our series of occasional contributor profiles featuring attorneys who publish their work on JD Supra. In this issue: attorney Jeff Ifrah.]
You could say it was the luck of the draw that led Washington, D.C.- based, Jeff Ifrah to develop his strengths as an advocate and counselor on legal and regulatory issues for providers of online gaming experiences (sometimes called iGaming).
“Back in 1997, the firm I was with happened to represent an offshore provider of online gaming,” he says. “I had a colleague who had recently joined the Division of Gaming Enforcement in New Jersey and we reached out on behalf of the client to resolve a regulatory issue successfully.”
The work was among the first-ever regulatory cases addressing online gaming at a time when the industry was brand new, especially in the United States. Since that first matter, Ifrah has continued to develop his practice and has represented online gaming providers in regulated states like New Jersey, Nevada, Delaware and Illinois. The work, especially its litigation side, has led Ifrah and his colleagues at Ifrah PLLC to handle most of the relevant legal issues for iGaming clients.
Ifrah points out that many attacks on iGaming companies rise out of unclear regulatory environments and dissatisfied customers. Defending iGaming clients against both government and consumer plaintiffs has become a strong part of his litigation skillset. The fact that the industry is regulated through a patchwork of state laws makes it a complex and fluid legal environment.
A number of recent court decisions and settlements regarding online poker gaming have provided a more stable set of legal precedents that may benefit iGaming providers and players, Ifrah says. The Department of Justice ruling that the Wire Act does not cover online gaming activities unrelated to a sporting event or contest has cleared some federal obstacles.
Because the courts have ruled that states have a sovereign right to control the online gaming conducted by players within their borders, the legal issues facing the industry will play out largely at the state level. Ifrah expects continuing pressure from regulators and customers claiming they were harmed in some way. Anti-trust actions by smaller entrants in the industry as well as fraud claims by unhappy players are two issues that regularly beset the industry leaders.
An upcoming movie with Justin Timberlake and Ben Affleck will illustrate one kind of suspicion among some players: that “bots” – hidden automated tracking programs implanted by super users that enable spying on the cards of other online poker players – skew game odds in favor of one player. Currently slated for a September 2013 release, “Runner, Runner” is a thriller that turns on the tension between an offshore gaming operator and his protégé. Ifrah notes that these suspicions are usually unfounded and difficult to prosecute.
“Defending my clients in court often involves being adept at the motion to dismiss,” he says. A successful dismissal relies on clarifying for the court the lack of specificity present in most complaints, a strategy facilitated by the fact that he has been practicing in the online gaming area for over fifteen years.
Ifrah has been sought out and recognized for his significant skills in the industry. He currently serves on the editorial board for World Online Gambling Law Report. He was named to Gaming Intelligence Magazine’s Hot 50 List last year. Chambers USA Guide lists him as one of America’s leading lawyers in litigation in the areas of White Collar Crime and Government Investigations.
Ifrah hears some conversations across the country proposing interstate gaming compacts, which might involve states with existing regulatory operations incorporating online gaming to extend their services and oversight to states who want to open their markets and reap the tax revenue. He isn’t willing to bet on this development, citing the self-interest of most states in expanding their own bureaucracies.
“States are now looking at online gaming as a revenue source, especially the ones that already have regulatory structures for physical gaming operations,” Ifrah reports. He cites New Jersey as a state with recently enacted laws that will allow the state budget to benefit from significant tax benefits from iGaming activity. Ifrah helps his clients find lobbyists in these states who can make the case that opening markets can offset the decline in other state revenues.
Despite the resistance of bricks and mortar casinos who fear losing players to online gaming, Ifrah expects markets to steadily expand to include iGaming because consumers want to participate in this entertainment virtually, just as they have moved to consuming books, movies and television through online sources. Chances are that this bodes well for his clients and for him.